TLKM - Eyes 400MW of DC capacity by 2030

TLKM - Eyes 400MW of DC capacity by 2030 Telekomunikasi Indonesia (TLKM) through its subsidiary Telkom Data Ekosistem (TDE/NeutraDC) is eyeing its data center (DC) capacity to reach 400 MW by 2030, compared to total current capacity of 69 MW. This is also in-line with the company's goal to attain a leadership in SEA market, boosted by strong demand especially cloud-based data storage. Indonesia’s demand for data center is projected to skyrocket by eight-times from IDR632 tn in 2020 to IDR4,531 tn by 2030, in line with contribution to the country's GDP from 4% to 18%. (Source : Bisnis Indonesia) Comment : We expect that TLKM's data center business should become a new backbone of growth in the future thanks to its exponential growth potential, despite growing competition in Indonesia's market from regional and global players. Currently, data center remains nascent in the country reflected by very low penetration of c. 12% or at 0.6w/ capita, far cry behind Singapore at 183 w/capita, while internet penetration has reached above 70% of total population, indicating huge untapped potential market. Meanwhile, TLKM is currently holding c. 40% of market share in Indonesia. In addition to that, Singapore that is seen to be the region’s data center proxy is on deceleration given government's tight policy concerning energy consumption post-temporary pause in 2021. With strong partnership and infrastructure support, we believe TLKM will be able to expand its market share overseas. TLKM's data centers currently stand at 30 with 25 of which are located in Indonesia.